old2 - 2. Lori borrows 10,000 for 10 years at an annual...

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Unformatted text preview: 2. Lori borrows 10,000 for 10 years at an annual effective interest rate of 9%. At the end of each year, she pays the interest on the loan and deposits the level amount necessary to repay the principal to a sinking fund earning an annual effective interest rate of 8%. The total payments made by Lori over the 10-year period is X. 5P1) _Sm.oa’= [0,000 CalculateX. =3 SFb 3 6?0.29S_ (A) 15,803 (B) 15,853 AN‘JQM INTWT 1-" .OQ({O’OOO} @ 15,903 - 900 :5 x: lo(‘}oo) +!9(69°n1“‘l -.: 157902.91' May 2005 Course FM May 2005 A loan is being repaid with 25 annual payments of 300 each. With the 10th payment, the borrower pays an extra 1000, and then repays the balance over 10 years with a revised annual payment. The effective rate of interest is 8%. Calculate the amount of the revised annual payment. Beam: awn-ma P6473" (A) 157 t z (B) 183 15.° =300-cx.—,-.,°, 2,310.34»! @ 234 AF'mc EKTM PH“: 4. (D) 257 Bio : zfs-gqu—(oao : I,.$"60,J"('1 (E) 383 tréww = R ' om” =3 (L = 2 33265- 1] Course FM Course FM The present value of a series 01°50 payments starting at 100 at the end of the first year and increasing by 1 each year thereafter is equal to X. The annual effective rate of interest is 9%. Calculate X. (A) 1 I 65 (B) 1 1 80 (C) 1 195 1210 (E) 1225 1“! = )L ‘3 100«aa_oq+1‘ 12 ‘-" ’ 2,11,97- 1?? . :0 -50M 05: .OGI May 2005 14. An annuity-immediate pays 20 per year for 10 years, then decreases by 1 per year for 19 years. At an annual effective interest rate of 6%, the present value is equal to X. In Cal lateX. . - cu PV=X= Zo'am.oe+®“)fil V (A) 200 = 2 20. [£3 (B) 205 (C) 210 (D) 215 @ 220 May 2005 1 7 Course FM 16. At the beginning of the year, an investment fund was established with an initial deposit of 1000. A new deposit of 1000 was made at the end of 4 months. Withdrawals of 200 and 500 were made at the end of 6 months and 8 months, respectively. The amount in the fund at the end of the year is 1560. Calculate the dollar—weighted (money-weighted) yield rate earned by the fund during the year. [5.60 ._ I°°°+1¢o +J'oo —toao — W rs - m0+.wo0/3>—w('/=.>—mc'0 .@ 13.57% (B) 20.00% 2 6 o 1:. 7- 0 t (C) 22.61% I“ °° (D) 26.00% (E) 28.89% May 2005 19 Course FM 17. At an annual effective interest rate of i, the present vaIue of a perpetuity-immediate starting with a payment of 200 in the first year and increasing by 50 each year thereafter 46 5'30 2 "V " 4’ Vi. ‘1‘ Calculate i. i (A) 3.25% 2a Caye- + (C) 3.75% ._‘ 1". _._._—-————-————"""""—' 20:53-33 (D) 4.00% ! (E) 4.25% = (9.0ch Course FM 20 May 2005 20. An investor wishes to accumulate 10,000 at the end of 10 years by making level deposits at the beginning of each year. The deposits earn a 12% annual effective rate of interest paid at the end of each year. The interest is immediately reinvested at an annual effective interest rate of 8%. Calculate the level deposit. (A) 541 A (:10) = ’°/°°° (B) 572 (C) 598 =1 IOWQ + «'2'R(Is)m.oi (D) 615 ._ '10 (E) 621 :7. K [to 'i .IZ<;S_§L-2”_._.)] =3 R :. 54/.‘f’) -—n—_._E May 2005 y 23 Course FM 23. The stock of Company X seiis for 75 per share assuming an annual effective interest rate of 1'. Annual dividends will be paid at the end of each year forever. The first dividend is 6, with each subsequent dividend 3% greater than the previous year’s dividend. Calculate i. (A) 3% fl Wan- (B) 9% (C) 10% 1 1% (E) 12% : Course FM 26 May 2005 25. A bank customer takes out a loan of 500 with a 16% nominal interest rate convertible quarterly. The customer makes payments of 20 at the end of each quarter. Calculate the amount of principal in the fourth payment. g (B) 0 9 (C) 2 7 l (D) 5.2 (E) There is not enough information to calculate the amount of principal. U) L = :6 =» J‘: .04 mm mm“- Y’M‘U 0F 20 pm QuAfin'rL THUI (.94ch Now-HM? FOIL firtmcmm. [LJPAYMWT- => P, '~-'- 0 . Course FM 28 May 2005 ...
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This note was uploaded on 04/06/2009 for the course MATH 210 taught by Professor Hubscher during the Fall '08 term at University of Illinois at Urbana–Champaign.

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old2 - 2. Lori borrows 10,000 for 10 years at an annual...

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